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According to the Ministry of Economy (MoE), the last day to submit information on ultimate beneficial owners was June 30, 2021. Many licensing agencies may want the details outlined in the resolution when a corporation applies for a trade license renewal or amendment.
What Does the UAE UBO (Ultimate Beneficial Owner) Law Entail?
The UAE Cabinet issued Cabinet Resolution No. 58 of 2020 on Regulation of Procedures Relating to Real Beneficiaries (the "Decision") on August 28, 2020, in accordance with the aforementioned.
An organization's actual beneficial owners, partners, and shareholders are referred to as the Ultimate Beneficial Owner in UAE. According to the Cabinet Resolution, all businesses registered on the UAE's mainland and in commercial-free zones are required to maintain a list of their actual beneficial owners, partners, and shareholders.
Read About: How Can You Identify an Ultimate Beneficial Owner?
The Essentials You Should be Aware of Regarding UAE UBO Regulations
Every firm operating in the UAE needs to comprehend the UBO rule. The UAE UBO rule requires that you keep in mind the following essential details:
1. Relativity
Both mainland and free zone firms are licensed in the UAE.
2. Dispensations
Due to the fact that they already give information to ADGM and DIFC regarding Real Beneficiaries/ Ultimate Beneficial Owners in UAE, companies licensed in ADGM & DIFC are exempt from this Decision.
A different set of rules may apply to businesses established in the financial-free zones of Abu Dhabi Global Markets (ADGM) and Dubai International Financial Centre (DIFC). Government-owned enterprises, whether federal or local, directly or indirectly, are not included in this judgment.
3. Conditions
Make and keep a Register of Partners or Shareholders and a Register of Real Beneficiaries. Within 15 business days of the modification taking effect, the legal person must be updated with any changes to the beneficial owners' information.
4. Actual Beneficiary
The FATF (Financial Action Task Force) defines the Ultimate Beneficial Owner as the natural person(s) who ultimately controls or owns a client or the natural person on whose behalf a transaction is carried out. The Real Beneficiary or the UAE UBO of a legal entity is:
- 25% or more of the shares or voting rights are owned or under control;
- Final ownership or control of 25% or more of the shares or voting rights, whether directly or indirectly;
- Has the authority to nominate or dismiss the majority of the board of directors, directly or indirectly;
- Possesses the power to control or have substantial influence over the legal organization;
- Has final authority over the management; or is in charge of the legal entity.
5. Real Beneficiary Register Contents
The following should be the contents of an Ultimate Beneficial Owner in UAE:
- Full name, country of birth, birthdate, and place
- Address or place of residence (for correspondence under this Decision)
- Number of the passport or ID card, issuing nation, date of issuance, and expiration date
- The circumstances under which he became a Real Beneficiary of the legal person and the date on which he did so
- The day that the individual stopped being the Real Beneficiary.
6. Partners' or Shareholders' Register Contents
The following should be the contents of the partners/ shareholders of the Ultimate Beneficial Owner in UAE:
- Full name, country of birth, birthdate, and place
- Address or place of residence (for correspondence under this Decision)
- Number of the passport or ID card, issuing nation, date of issuance, and expiration date
- Number of shares owned, their category, and the accompanying voting rights
- When you first become a partner or shareholder.
- Address of the main office, name of senior management staff (and all personal identity documents), and in the case of a foreign shareholder or partner, name and address of the legal representative in the UAE if the partner or shareholder is a legal person.
Also Read in Details About the Contents of a UBO Register of a Company.
7. Presentation of Information
The legal person must grant permission for a natural person residing in the UAE to inform the Registrar of the pertinent information from the Registers. The natural person's name, contact information, address, and a copy of their passport or ID card must be provided to the Registrar by the legal entity.
8. Submission of Administrative Penalties
Administrative fines and sanctions may be imposed if the Licensing Authorities are not provided with the needed information. According to the Ministry of the Economy, administrative consequences will be implemented if the resolution of the Ultimate Beneficial Owner in UAE is not followed.
A copy of the resolution, which details all administrative sanctions imposed on violators in accordance with the regulation of UBO in UAE, is available online at the Dubai Economic Department.
How to Comply with Ultimate Beneficial Owner in UAE?
A company should do the following to comply with the rules of UBO in UAE:
Obtain a UAE UBO Certificate
An entity that successfully complies with UBO rules is granted a UBO Certificate. The certificate attests that the organization has verified its UBO and maintains records of its beneficial owners and other crucial information.
Follow the Proper Guidelines/Procedures of the UAE UBO
When establishing a new business relationship or onboarding new employees, your organization must adhere to policies and processes to gather data regarding all people who have significant ownership or control.
Note the Other Requirements of UBO in UAE
- Following Steps for UBO Reporting and Compliance
- Find UBO and collect your most recent personal information.
- Creating and maintaining corporate secretarial records,
- The appropriate authorities should receive your UBO declaration.
Maintain Correct and Up-to-Date Information
Businesses should submit and keep accurate and current information, as doing so will subject them to penalties for providing false or misleading information. Along with the charges, your company could lose its reputation and clients' trust.
Also Read About: UBO Disclosure Requirements in UAE
Final Thoughts Regarding Compliance of UBO in UAE
The UAE has made progress in the fight against the financing of terrorism, money laundering, and other illicit acts with the implementation of laws like the Ultimate Beneficial Ownership. Additionally, the UAE's commitment to the OECD's BEPS measures is compatible with this choice.
The UAE government has recently passed a number of other laws to improve business transparency, including the Economic Substance Regulations, CbCR Reporting, and AML Regulations. As firms improve their general record-keeping and disclosure requirements, more transparency in the nation's economic system is anticipated.
Streamline the Registration of UBO in UAE and JAXA Compliance
Our team can provide additional advice and direction on this legislation and development to help you. If you have any queries, get in touch with us.
